Laundromats have undergone radical changes in recent years, adding food service, video games, drop off service, and many other options to become one-stop centers for busy customers. Yet the small neighborhood laundry service still has its place. One of the biggest mistakes that new laundromat owners make is trying to keep up with the big boys, growing and expanding haphazardly and unsustainably. A written business plan can keep your growth on track, guiding your expansion in a secure way. In addition, a laundromat requires a significant upfront cash outlay. If you are seeking financing, your business plan is absolutely essential.
What Is a Business Plan?
Your business plan provides a quick snapshot of your laundromat today, along with a detailed growth plan for the next three to five years. It outlines your business goals, notes possible obstacles, and describes your strategies for meeting your goals. As a living document, it should be updated frequently as the laundromat grows and changes.
Although it is normally written last, the executive summary is the introductory section of the business plan. You have only the first page to capture the attention of lenders and investors, so use that space wisely. Provide a concise description of your laundromat, a market analysis summary that identifies an unfulfilled need, and the unique qualifications of your laundromat to meet that need.
The company analysis focuses on your laundromat as it is at this moment in time. Talk about its founding, current business stage, and legal structure. Identify past milestones, such as securing key funding or partnering with a vendor to provide machines at a significant discount. Also expound upon the unique qualifications mentioned in the executive summary. Perhaps you have patented a new washing technology or secured a liquor license to become the first full service bar and laundry in town.
The industry analysis looks at the overall market landscape and how your laundromat will fit in. However, you do not need to analyze the entire laundry business, only that segment into which your laundromat falls. Is yours a corner laundromat with a handful of coin operated machines? Do you offer drop-off service? Is your laundromat big and modern, equipped with oversized card-operated machines and a snack bar? When you select your niche, research the future projections and trends that affect that part of the market. Create a strong plan for overcoming any potential challenges.
Who will use your laundromat? Are they working class singles, high-end apartment dwellers, or middle class families? Do they want to drop quarters in the machines or buy reusable cards? Do they view the laundromat experience as something to get through as quickly as possible, or do they see it as a social gathering spot where they could spend an enjoyable evening? Are they interested in affiliated services, such as dry cleaning? Narrow down their demographics as specifically as you can, and then identify their unique needs. Draw up a plan for meeting those targeted needs.
Your direct competitors are nearby laundromats that meet an identical need for your target market. Your indirect competitors are services that meet a different need for your market, or an identical need for a different market. Name and discuss each direct competitor, focusing on the things that set your laundromat apart. Group your indirect competitors together and discuss them as a whole.
Your marketing plan should focus on the four P’s: Product, Price, Place, and Promotion. Product lists every service or item you sell, while Price explains how much each thing costs and why you set those particular price points. Place is your laundromat’s physical location, and Promotion is your way of enticing new customers. In addition, Customer retention explains how you will build loyalty.
The operations plan explains how you will meet the goals you identified earlier. Everyday short-term processes are the daily tasks of running your laundromat, from selling reusable cards to maintaining the machines. Long-term processes are your strategies for meeting such business goals as opening a second location or purchasing higher capacity machines.
Many small laundromats have only a skeleton staff, making the management team section a challenge. Yet lenders and investors want to know that you have the business chops to make the laundromat a success. If anyone on your team has an MBA or solid business experience, share that background here. Otherwise, try to find a mentor or business advisor, and explain how that person will directly impact the company’s growth.
Investors and lenders scrutinize the financial plan in great detail, yet this can be the most challenging section to write. You must outline each of your revenue streams independently, including their relative importance and timeline for implementation, as well as your projected sources of outside funding. You must also summarize both your past and future Balance Sheets, Income Statements, and Cash Flow Statements, based on key assumptions that are both reasonable and verifiable through an analysis of your competitors. Finally, you must include a strong exit strategy that demonstrates a deep understanding of your market and a desire to capitalize on profitability.
In the appendix, attach your full financial projections along with any other documentation that supports your claims. For example, patent details or letters that prove a key strategic partnership should be provided here.
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